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Abstract

This study investigates how Internal Control and Operational Efficiency contribute to the financial performance of micro, small, and medium enterprises (MSMEs) in the food and beverage sector in West Semarang District, with Financial Reporting Quality serving as a mediating variable. A quantitative research design was employed, and the data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS 4. The findings reveal that both Internal Control and Operational Efficiency significantly and positively influence Financial Reporting Quality. In addition, Operational Efficiency and Financial Reporting Quality exert positive and statistically significant effects on Financial Performance. However, Internal Control does not demonstrate a statistically significant direct relationship with Financial Performance. The mediation analysis further indicates that Financial Reporting Quality mediates the relationships of both Internal Control and Operational Efficiency with Financial Performance. These results underscore the importance of reliable financial reporting in translating internal control practices and operational efficiency into improved financial outcomes for food and beverage MSMEs.

Keywords

Internal control Operational efficiency Financial reporting quality Financial performance MSMEs

How to Cite

Citation Format
Saiman, S. (2026). Financial Reporting Quality as a Mediating Mechanism Between Internal Control, Operational Efficiency, and Financial Performance of MSMEs. International Journal of Management Science and Information Technology, 6(2), 3061-3068. https://doi.org/10.35870/ijmsit.v6i2.8884

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Author Biography

Saiman, Sekolah Tinggi Ilmu Ekonomi Totalwin

Management Study Program, Sekolah Tinggi Ilmu Ekonomi Totalwin, Semarang City, Central Java Province, Indonesia

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Copyright (c) 2026 Saiman

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